Navigant Research Blog

The growth of the Internet of Things is continually expanding the number of connected devices in our homes, offices, retail stores, and healthcare facilities, to name a few. According to Navigant Research’s recent report, The Smart Home, global smart home platform revenue is expected to increase from $4.2 billion in 2017 to $39.5 billion in 2026. This significant increase in revenue makes it clear the smart home is here to stay. With the smart home on the rise, what is the real added value these solutions offer to consumers?

Do Smart Solutions Provide Enough Value?

When you think of the smart home, it’s not uncommon to first picture Amazon’s Alexa-enabled voice activated devices, which allow users to play music, listen to the news, receive weather updates, and control compatible devices like a Philips Hue smart bulb all through voice. While devices like smart bulbs do provide additional benefits outside of voice control—such as dimming, color changing, and reducing energy use—how much additional value are these solutions really providing? Philips Lighting recently announced new software features that will sync Philips Hue lighting with gaming, movie, and music content. While this update does include additional features, how much value is this really adding? Is it helping to carry the smart home market forward? Is voice control, dimming, syncing with video games and movies, and energy savings enough? I would argue no. The added convenience of voice control and color-changing or dimming features through devices like smart bulbs do not provide enough of an advantage over more traditional products, like LEDs, for many consumers to justify paying the additional costs. The concept of voice control and changing the color of lighting through a mobile app are novel ideas that provide enough of a wow factor to intrigue consumers, but these features are not enough to carry the momentum of the smart home into the future.

Security as a Value Proposition for the Smart Home

Smart home vendors realize the need to provide additional value propositions for their products to appeal to the mass market and increase adoption of smart solutions. One of the top key trends expected in 2018 by Consumer Reports for the smart home industry is security. To be sure, this is not the only trend of the smart home this year; others range from additional connected devices to increased artificial intelligence to home healthcare, covered in a recent Navigant Research blog. Many of the trends anticipated for 2018 are about providing additional value to consumers for smart home solutions.

The desire for security is a universally shared need and one the smart home market can capitalize on. A recent example of this is Ring, a smart video doorbell company, acquiring Mr Beams, an LED lighting company offering indoor and outdoor LED fixtures. As a result of Ring’s first acquisition, the company launched a line of outdoor security lights. The new line includes pathway lights, step lights, and spotlights that will work jointly with Ring’s security cameras and doorbells. This acquisition not only highlights the growing significance of security as a use case driving progress in the smart home market, but also the importance of providing additional value to smart home products. Lighting integrated with security systems are a natural fit that can better highlight the value of smart home solutions for consumers than features like voice activation and remote control, and more logical partnerships will emerge. Security is just one example of a use case that can transform the smart home from providing additional convenience and a novelty features to a becoming a necessity for consumers.

Over the past week, the internet has been captivated by Alexa’s pick for the Eagles to win Super Bowl LII, with tweets, videos, and articles featuring Alexa’s latest mantra: “I’m flying with the Eagles with this one because of their relentless defense and the momentum they’ve been riding off their underdog status. E-A-G-L-E-S. Eagles.”

Though most will look at this latest Alexa craze with a small chuckle and admire the assistant’s cleverness (or, if a Patriots fan, seething and swearing off Alexa), to me this response demonstrates a small step forward in user experience (UX) that has been lacking in digital assistants.

What Is UX?

UX is an increasingly popular acronym floating around the tech industry (not to be confused with user interface [UI]), and it captures a field targeted at improving the usability, ease of use, and pleasure provided in interactions between consumers and products. In the world of digital assistants, UX is about the smarts of a digital assistant and its ability to complete tasks asked of it in a satisfactory way to users.

Some would argue that, while there have been significant strides in voice activation as a UI, one of the biggest obstacles to the mass adoption of digital assistants is lacking UX. For anybody who has used a digital assistant, this is completely understandable. There is nothing more frustrating than asking Google Assistant, Siri, Alexa, or any other the other various digital assistants a simple question, only to have it not understand or reference something entirely unrelated. This type of mishap is frequent enough that it has even resulted in satire about the experience with digital assistants. One such example is a CollegeHumor clip where a woman asks, “Siri, how big is the Serengeti?” and Siri responds, “No problem. Show me pictures of spaghetti.”

Personality Is a Plus

While Alexa rooting for the Eagles isn’t exactly a groundbreaking advancement in the field of artificial intelligence and natural language processing, the fact that users are fascinated with this phenomenon and think Alexa has a sense of humor creates a more positive UX with digital assistants, and can help spur adoption of these devices. Personally, the fact that I get a clever response from Alexa on who will win the Super Bowl, while my Google Assistant says, “My apologies. I don’t know that,” gives Alexa a leg up on Google because taking a side is more personable than saying nothing at all. It’s a small gesture on Amazon’s part that makes a big difference in my experience as a user. As it so happens, I also agree with Alexa. Go Eagles!